Nine countries are opposed to intervening in the electricity market

Germany, Denmark, Ireland and six other countries said yesterday that they will not support the reform of the European Union (EU) electricity market, ahead of an emergency meeting of energy ministers to discuss the recent price increase.

European gas and energy prices soared to record levels and have remained high, prompting countries like Spain and France to invite a redesign of electricity market rules.

However, Austria, Germany, Denmark, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands said they cannot support any interventionist measures.

Countries said they welcomed the “toolbox” the EU proposed last week to protect consumers and vulnerable people. But they stressed that the price situation is temporary caused by global factors.

In addition, they warned about the risks of intervention in the market.

“(Interfering) is not going to be the remedy to mitigate the increase in energy. (…) We need a more integrated market, ”they said in a joint statement.

“Since price spikes have global drivers, we must be very careful before interfering with the design of domestic energy markets,” they noted.

“This will not be a remedy to mitigate the current rise in energy prices linked to the fossil fuel markets.”

Energy ministers will meet today to discuss what path they will take in response to the price hike. Most, so far, have resorted to tax cuts and subsidies.

Russia could use gas as a political weapon

US President Joe Biden’s global energy security adviser said Monday that Russian President Vladimir Putin is close to using natural gas as a political tool if Moscow curbs fuel exports to Europe, which is in in the middle of an energy crisis.

“I think we are approaching that point, where Russia does indeed have the gas to supply and decides not to, and will only do so if Europe agrees to other demands that have nothing to do with it,” said Amos Hochstei.

He argued that gas prices in Europe have risen not only because of events in the region, but also because of a dry season in China that has reduced hydroelectric power production and increased global competition for natural gas.

However, although several factors have caused the gas crisis in Europe, Russia is the best placed country to help it, he said.

“I have no doubt, and the International Energy Agency itself has confirmed, that the only supplier that can make a big difference to European energy security right now, for this winter, is Russia,” said Hochstein.

Russia can increase its gas production and must do so quickly through existing pipelines, he added.

Yuriy Vitrenko, director of the Ukrainian state energy company Naftogaz, said this month that Russia was trying to pressure Europe – through fuel supply reductions – to certify its Nord Stream 2 gas pipeline.

According to the BBC, this gas pipeline aims to double Russia’s gas exports to Germany, without having to go through Ukraine. Washington fears that the gas pipeline will increase Russia’s ability to control supplies to Europe, as it would reduce US participation in the European natural gas market.

The megaproject, promoted by Moscow and Berlin, is the second connection of its kind between the two countries, since the first (called just Nord Stream) was inaugurated in 2011.

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